A 3.4% GDP Print Hides a ‘Haunted’ Housing Market and a September Stall
The U.S. economy grew at a 3.4% annualized pace in the third quarter, the Bureau of Economic Analysis said Thursday, up from 2.2% in the second quarter and above the 3.2% median forecast. Consumer spending rose 3.8%, and Goldman Sachs economists called the makeup of the quarter “strong.”
TL;DR
- U.S. GDP grew at a 3.4% annualized pace in Q3, exceeding forecasts.
- Growth was significantly boosted by investments in AI-related equipment and industrial equipment.
- Private inventory investment contributed nearly half of the headline GDP gain.
- Housing investment fell 3.3% in Q3, and buyer traffic is at a 15-year low.
- Real consumer spending was flat in September, with expectations of a future slowdown.
- The labor market remains strong, with initial jobless claims at their lowest since 1969.
- Some economists believe the AI investment boom is peaking.
- Real final sales to private domestic purchasers, excluding inventories and trade, rose 4.9%, indicating strong domestic demand.